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'Silicon Valley' Dream Shrinks With Computer Industry : Technology: While large firms are battered, smaller companies prosper. Executives say the county remains attractive.

September 07, 1992|JOHN BATTELLE | TIMES STAFF WRITER

Battered by defense cuts and offshore competition, the Ventura County computer industry has shrunk significantly since its peak in the mid-1980s, county statistics show.

But the decline hasn't affected everyone equally: While the larger companies that once employed thousands in the county have been hard hit, a significant number of smaller high-tech-related firms continue to prosper.

And Ventura County remains an attractive location for computer-related firms, real estate and business executives said.

In 1985, more than 15,000 workers, or 7% of the work force, were employed in computer-related jobs in Ventura County, according to a report by the American Electronics Assn.

By 1990, the number of computer-related workers had dropped to about 9,100. This year, the figure stands at a little more than 7,000, or 2.9% of the work force, according to the Ventura County Economic Development Assn.

In the heady days of 1985, some real estate and planning experts believed that the Ventura County area would become a high-technology center rivaling even Northern California's Silicon Valley in terms of economic importance and new product development.

A Santa Barbara professor had invented the gallium arsenide computer chip, which many experts heralded as a speedier replacement for the silicon chips that powered Silicon Valley's rise.

Land was cheap, and real estate speculators were snatching up parcels from Thousand Oaks to Ventura in the hope that they could sell to expanding computer companies eager to locate in the heart of a new boom industry, real estate agents said.

But because of its cost, the gallium arsenide chip never really took off, and in the past few years, the computer industry's growth has slowed to almost zero nationwide as defense-related contracts withered and the computer market flattened out.

And while there is still a significant base of high-technology companies here, particularly in the east county, no one is predicting a Ventura County sequel to Silicon Valley anytime soon.

"We never fulfilled the prophecy of the second Silicon Valley," said Don Carlton, a Ventura commercial realtor. "There was no land rush" by high-tech companies.

Larger companies have suffered the most in the past few years. Tandon Corp., a major computer supplier in Moorpark, has undergone restructuring and downsizing, as have the Ventura County offices of Wangtek, Unisys and IBM.

"Like the rest of the state, jobs in high-tech are very soft now," said Steve Cummings, publisher of the Ventura County Statistical Abstract, a compendium of economics facts and figures. "A lot of these companies have been hit hard by defense cuts."

But smaller, nimbler computer-related companies are still strong in Ventura County, particularly those that cater to the personal computer market.

"There is a change in emphasis," said Georgellen Hofhine, president of the Consortium for Advanced and Technical Education of Newbury Park, a joint project of local businesses and universities that offers advanced degrees in electrical engineering, computer science and other technical fields. "I am seeing a lot of small- to medium-size companies."

Smaller software firms and companies specializing in research and development seem to be the trend, said Jack Gilbert, president and CEO of TOLD Corp., an Oxnard developer.

In the mid-1980s, high-tech businesses were springing up everywhere, but "we are better off this year leasing the smaller buildings," Gilbert said.

Many high-tech businesses have taken their manufacturing and production facilities out of the country, Gilbert said.

"The truth of the matter is, if you are going to hire more than 100 people, you are better off taking your plant to Mexico or the Far East," he said.

That may be true for most businesses, but there are some exceptions. One of them is Practical Peripherals, a company that makes computer modems, or devices that let computers talk over standard phone lines.

The 700-person company recently consolidated its entire operation, from marketing to manufacturing, into a 60,000-square-foot building in Thousand Oaks.

"We are committed to staying in the United States," said Michael Seedman, president of Practical Peripherals. Seedman said his company gains competitive advantages over offshore competition because his Ventura County employees ensure better quality control.

Seedman said he came to the Thousand Oaks area for the quality of life and because the city was a good partner.

"We had absolutely no problems working with them," Seedman said. "They helped the whole way."

Other high-tech executives agree. Representatives of these types of companies say Ventura County is an attractive place to locate a growing business.

"We could build our own building for far less than we could in the San Fernando Valley," said Hy Kolkowitz, a project manager and assistant to the president of Simi Services, a software consulting firm that moved to Simi Valley from Hollywood six years ago.

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